My View: Judd Gregg November 2013
Though the government shutdown ended a little over a month ago, its effects still linger on. In an editorial published today in The Hill, former Senator Judd Gregg (R-NH) reviews the aftermath of the shutdown and debt ceiling debacle, to try and determine what it accomplished.
Gregg points out that these self imposed crises had negative consequences that extend beyond the federal worker furloughs and loss of government services. They imposed harm on the economy and had negative fiscal ramifications.
The cost of short-term borrowing for the government went up 9 basis points during this period of artificially induced crisis over paying the debt. The six-month treasury notes went up 22 points.
This may not sound like much but it actually represented a totally unnecessary increase in spending to pay for these higher interest charges. The added expenditure totaled close to $400 million.
Now, not only do the American taxpayers have to pay for this additional debt, they have to pay interest on the funds borrowed to pay the debt.
At a time when our elected officials should be focused on addressing the challenges posed by our nation's mounting long-term fiscal problems, these crises added to our debt:
Standard & Poor’s estimates the hit to the economy to have been around $24 billion. This also translates into lost tax revenues for the government.
Those tax revenues would have paid for obligations which the government has incurred. Now, without those revenues, these obligations will have to be paid for by more borrowing.
Congress should learn from this experience and stop playing politics with the debt ceiling and the fiscal future of this country. The budget conference committee is an opportunity to forge a compromise on spending levels in a responsible manner. Hopefully, they can take full advantage.
Click here to read the full op-ed.
"My Views" are works published by members of the Committee for a Responsible Federal Budget, but they do not necessarily reflect the views of all members of the committee.